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Medicare

Significant Changes to Medicare Advantage and PDP Commissions for Agents and Brokers in 2025

By July 2, 2024No Comments

In 2025, the commission landscape for Medicare Advantage (MA) and Prescription Drug Plans (PDP) will undergo notable changes for agents and brokers. Despite a decade-long trend of increasing broker commissions, the Centers for Medicare & Medicaid Services (CMS) introduced the 2025 Medicare Final Rule, which significantly alters the compensation structure for Part C and D sales.

Key Points on Medicare Agent Compensation for 2025

To eliminate financial biases and ensure a more standardized approach to compensation, CMS is implementing several changes:

  • Elimination of Separate Administrative Fees: Administrative fees that vary between plans will no longer be permitted.
  • Fixed Compensation Rates: Agents will receive a fixed amount for each Medicare Advantage (MA) and PDP sale.
  • Compensation Caps: There will be a cap on non-salary compensation for agents and brokers.
  • Prohibition of Enrollment Incentives: Any incentives that could potentially bias an agent’s recommendation will be prohibited.

Going forward, a standardized agent compensation rate will apply to all Medicare Advantage and PDP sales, adjusted annually based on fair market value (FMV). This means that in a given region, commissions will be consistent across different carriers and plans for both Medicare Advantage and PDP enrollments. The FMV for initial commissions will increase by $100, and the FMV for renewal commissions will increase by $50.

Industry leaders anticipate that some PDP plans may not pay commissions in 2025 because of this additional $100 and $50 increase for PDP plans. If carriers make a PDP plan “non-commissionable,” they do not pay commission and do not pay the additional $100 and $50 payments.

These changes are likely to eliminate health risk assessment (HRA) fees, AHIP reimbursements, and enrollment-based bonuses. The industry is awaiting further clarification from CMS on these adjustments.

Medicare PDP Commissions

For 2025, agents will see an increase in FMV for PDP commissions:

  • Initial Commissions: Rising from $100/member/year to $209/member/year, marking a 109% increase year-over-year.
  • Renewal Commissions: Increasing from $50/member/year to $105/member/year, reflecting a 110% increase year-over-year.

Medicare Advantage Commissions

The 2025 FMV for Medicare Advantage commissions will also see an increase:

California and New Jersey:

  • Initial commissions will rise from $762/member/year to $880/member/year, a 15.49% increase.
  • Renewal commissions will go from $381/member/year to $440/member/year, a 15.49% increase.

Connecticut, Pennsylvania, and Washington D.C.:

  • Initial commissions will increase from $689/member/year to $805/member/year, a 16.84% rise.
  • Renewal commissions will go from $345/member/year to $403/member/year, a 16.81% increase.

Puerto Rico and the U.S. Virgin Islands:

  • Initial commissions will rise from $418/member/year to $528/member/year, a 26.32% increase.
  • Renewal commissions will increase from $209/member/year to $264/member/year, a 26.32% rise.

All Other States:

  • Initial commissions will go from $611/member/year to $726/member/year, an 18.82% increase.
  • Renewal commissions will increase from $306/member/year to $363/member/year, an 18.63% rise.
InitialRenewal
ProductRegion20232024%20232024%
MAPDNational$611$72618.82%$306$36318.63%
CT, DC, PA,$689$80516.84%$345$40316.81%
CA, NJ$762$88015.49%$381$44015.49%
Puerto Rico, U.S. Virgin Islands$418$52826.32%$209$26426.32%
PDPNational$100$209109%$50$105110%

 

The industry is closely monitoring these developments and anticipates further details from CMS regarding these changes.

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If you have any questions or need further clarification on these Medicare commission changes, please don’t hesitate to reach out to our FMO at 919-460-6073 or info@carolinaseniormarketing.com. We are here to help you navigate these updates and ensure you have all the information you need to succeed!